AN ANALYTICAL STUDY ON THE RELATIONSHIP BETWEEN MARKET CAPITALIZATION AND EARNINGS STABILITY IN BLUE-CHIP COMPANIES WITH SPECIAL REFERENCE TO RELIANCE INDUSTRIES AND TATA CONSULTANCY SERVICES

The relationship between market capitalization and earnings stability has long been a focal point in financial research, particularly in the context of blue-chip companies that are perceived as stable investment avenues. This study examines how firm size, as measured by market capitalization, influences earnings stability, with specific reference to Reliance Industries and Tata Consultancy Services (TCS), two leading Indian blue-chip firms. The research problem arises from the inconsistency in empirical findings regarding whether larger firms inherently demonstrate more stable earnings patterns.

The primary objectives of the study are to evaluate the relationship between market capitalization and earnings stability and to analyze the extent to which firm size impacts financial performance consistency. The study employs a quantitative research design using secondary data collected from annual reports and stock exchange databases for the period 2019–2024. Statistical tools such as correlation and regression analysis are utilized to test the hypotheses.

The findings indicate a positive relationship between market capitalization and earnings stability, suggesting that larger firms tend to exhibit lower earnings volatility due to diversified operations and stronger governance structures. This study contributes to capital market literature by offering insights into investment decision-making and risk assessment for institutional and retail investors.